Decision No. 83-R-2013

CSX Transportation, Inc. (CSXT) applied to the Canadian Transportation Agency (Agency) for a variance to its Certificate of Fitness to reflect:

1. the construction of a railway line to replace part of the railway line over which CSXT currently operates, which is owned by its subsidiary St. Lawrence and Adirondack Railway Company.  The proposed construction will be between mileages 210.45 and 212.39 of the Montreal Subdivision (new main line track) and the Valleyfield Industrial Track (VIT), including the wye-track, between mileages 0.00 and 1.00, in the area of Salaberry‑de‑Valleyfield, Quebec;
2. the operation of the new main line track and the VIT, including the wye-track, between mileages 0.00 and 1.93, originating at mileage 210.81 and reconnecting at mileage 212.17 of the Montreal Subdivision, in the area of Salaberry-de-Valleyfield, Quebec; and
3. the deletion of New York Central Lines, LLC as this company is no longer a subsidiary of CSXT.

CSXT’s current Certificate of Fitness No. 97004-2 permits CSXT to operate the lines of railway set out below:

1. Through a running rights agreement between CSX Transportation, Inc. and its wholly-owned subsidiary, the Lake Erie and Detroit River Railway Company, a line of railway in Canada from Sarnia to Chatham, Ontario, on the Sarnia Subdivision.
2. Through an operating agreement between CSX Transportation, Inc. and its affiliate, the New York Central Lines LLC, a line of railway owned by New York Central Lines LLC’s subsidiary St. Lawrence and Adirondack Railway Company, between the Canada/USA border near Fort Covington, New York and Valleyfield, Quebec and between Beauharnois and Adirondack Junction, Quebec; and through a lease agreement with the Canadian National Railway Company, a line of railway between Valleyfield and Beauharnois, Quebec.

Subsection 92(1) of the Canada Transportation Act (CTA) states that the Agency shall issue a certificate of fitness for the proposed construction or operation of a railway if the Agency is satisfied that there will be adequate liability insurance coverage for the proposed construction or operation, as determined in accordance with the Railway Third Party Liability Insurance Coverage Regulations, SOR/96-337.

Section 93 of the CTA provides that the Agency may, on application, vary a certificate of fitness.

The liability insurance requirement is an ongoing requirement and the Agency must be satisfied that a company constructing or operating a railway under federal jurisdiction continues to have adequate third party liability insurance coverage.

With respect to the adequacy of the third party liability insurance coverage, the Agency has reviewed the certificate of insurance naming CSXT as additional insured under the policies of its general contractor for the construction of the proposed railway line. The Agency has also examined the documentation and statements demonstrating that CSXT has also acquired third party liability insurance coverage under its own policies in respect of the construction and the operation of the new line of railway in addition to the lines of railway currently operated under CSXT’s existing Certificate of Fitness.

In addition, the Agency has examined CSXT’s financial capability to self-insure for the amount of the self-insurance based on its financial information.

The Agency is satisfied that there is adequate third party liability insurance coverage for the construction and the operation of the new line of railway and that there continues to be adequate third party liability insurance coverage for CSXT’s current railway operations set out in its existing Certificate of Fitness, including self-insurance.

Accordingly, the Agency, pursuant to subsection 93(1) of the CTA, varies Certificate of Fitness No. 97004-2 as follows:

1. To operate, through a running rights agreement between CSX Transportation, Inc. and its wholly-owned subsidiary, the Lake Erie and Detroit River Railway Company, a line of railway in Canada from Sarnia to Chatham, Ontario, of the Sarnia Subdivision.
2. To operate on a line of railway owned by its subsidiary St. Lawrence and Adirondack Railway Company, between the Canada/USA border near Fort Covington, New York and Valleyfield, Quebec and between Beauharnois and Adirondack Junction, Quebec, of the Montreal Subdivision; and to operate, through a lease agreement with the Canadian National Railway Company, a line of railway between Valleyfield and Beauharnois, Quebec.
3. To construct a line of railway between mileages 210.45 and 212.39 of the Montreal Subdivision and the VIT, including the wye-track, between mileages 0.00 and 1.00, originating at mileage 210.81 of the Montreal Subdivision, in the area of Salaberry-de-Valleyfield, Quebec.

Certificate of Fitness No. 97004-3 supersedes Certificate of Fitness No. 97004‑2 issued to CSXT on October 31, 2006.